-- Rising expenses and debt. The cost of services increased 3.9% to $129.05 million from $124.19 million while selling, general and administrative expenses edged up 6.5% to $17.95 million from $16.85 million. Furthermore, total debt for the quarter spiked 6.4% to $307.10 million from $288.72 million deteriorating the debt-to-equity ratio to 0.84 from 0.75.
Healthways Inc.'s Q1 FY09 revenue grew 5.5% to $185.40 million from $175.82 million in the prior year's quarter due to contributions from the commencement of new contracts, increase in the recognition of performance-based fees and growth in the number of self-insured employers on behalf of its health plan customers. Geographically, international revenue totaled $3.80 million and domestic revenue totaled $181.60 million. Moreover, domestic commercial available lives increased 6.3% to 195.00 million from 183.40 million while domestic commercial billed lives advanced 22.5% to 32.70 million from 26.70 million in Q1 FY08 attributed to signing of new contracts, expansion or extension of contracts with health plans and employers. Furthermore, the annualized revenue in backlog stood at $31.90 million compared to $51.00 million a year ago.
During the quarter, gross profit margin widened 103 basis points to 30.40% from 29.37% a year ago despite a 3.9% increase in cost of services. Cost of services stood at $129.05 million compared to $124.19 million. Selling, general, and administrative expenses edged up 6.5% to $17.95 million from $16.85 million. Operating margin increased 31 basis points to 14.15% from 13.84%. Interest expenses declined 4.5% to $5.10 million from $5.34 million there by improving the interest coverage ratio to 5.15 from 4.55 a year ago. Finally, net income for the quarter swelled 12.5% to $12.58 million or $0.37 per share compared to $11.18 million or $0.30 per share in the prior year's quarter attributed to higher revenue.